This decree describes the procedures that have to be followed when issuing an advance tax ruling (ATR). An ATR provides advance certainty in respect of the tax consequences of a contemplated transaction or combination of related transactions. The term "ATR" is reserved exclusively for the provision of advance certainty in respect of the situations described in paragraph 3 of this decree.

2. Organisation

The request for the issue of an ATR should be addressed to the competent tax inspector. To ensure the co-ordination of the practice, the tax inspector will always submit the request to the APA/ATR team of the Tax Office (Large Enterprises) in Rotterdam for binding advice. The APA/ATR team of the Tax Office (Large Enterprises) in Rotterdam will, if necessary, consult with the relevant knowledge groups to secure a uniform policy both in principle and in practice.

Because the APA/ATR team of the Tax Office (Large Enterprises) in Rotterdam is represented in all of the relevant knowledge groups, this form of consultation can take place during the assessment process, thereby helping to ensure that the request is dealt with both swiftly and efficiently.

3. Binding advice

The local tax administration should submit the following requests for advance certainty for binding advice:

requests for advance certainty on the application of the participation exemption to conduit companies in international structures and to top holding companies where none of the subsidiaries of the top holding company conducts any business activities in the Netherlands;

requests for advance certainty in respect of international structures involving forms of hybrid finance and/or hybrid legal entities. The Decree of 30 March 2001 (No. RTB2001/1379M2 should be taken into consideration in assessing these requests; and

requests for advance certainty on whether or not an entity that is registered abroad may be regarded as having a permanent establishment in the Netherlands.

4. Requests

Depending on the facts and circumstances of the specific case, a (potential) taxpayer will need to provide the tax authorities with at least the following information:

a detailed description of the facts and the contemplated legal acts covered by the request;

the names of the companies and permanent establishments involved;

the other state or states to which the request relates;

information on the group's worldwide legal structure and history (including full information on the beneficial owners of the applicant's capital); and

the financial years to which the request will apply.

5. Duration

The applicant is initially required to specify the period for which it is reasonable to grant advance certainty. In principle, a period of four years is regarded as reasonable.

On the expiry of the agreed period, at the request of the taxpayer, the tax authorities will assess whether or not a new ATR can be issued under the same conditions.

6. Appraisal of the request

In appraising the request, the tax administration will take account of all of the relevant facts and circumstances relating to the transaction(s) for which advance certainty is requested.

7. Exchange of information

As part of the determination agreement, the applicant is required to declare that the information included in the ATR is not subject to one of the exemption clauses set out in Article 13, Paragraph 3, of the International Assistance with Levying Taxes Act (Wet op de internationale bijstandsverlening bij de heffing van belastingen, WIB) regarding commercial, industrial or professional secrets. In this way, possible conflicts between the tax administration and the applicant are avoided.

8. Determination agreements

In order to establish the consequences of an ATR, the tax administration will enter into a determination agreement with the entity requesting the ATR to make a formal written record of the ATR. The tax administration will take into account the framework for determination agreements, as described in the Decree of 1 December 1997 (No. AFZ97/2412). This decree includes a procedure for recording negative decisions on a request for a determination agreement. In respect of this, the following should be noted. The orientational phase should not be regarded as constituting a form of consultation, as defined in the above decree. There will only be a form of consultation for which a written record is required to be drawn up once the request in question is more or less fully consistent with the framework for ATRs, as issued under the government's current policy. The decision by the tax inspector in this specific case not to conclude a determination agreement will be communicated to the taxpayer in writing. In these cases, a record is drafted as described in the Decree of 1 December 1997 (No. AFZ97/2412).

The determination agreement will at least include the following elements:

the names and addresses of the entities that are to be covered by the agreement;

the facts, legal acts and financial years to which the agreement applies;

a description of the tax consequences;

a record of the relevant conditions that constitute the basis for the application of the relevant tax consequences;

the agreed procedures to respond to possible changes in the prevailing circumstances;

where relevant, a description of the arrangements that have been made for dealing with related tax issues;

a description of the conditions that the entity must meet in order for the agreement to remain valid, together with a description of the procedures that the entity must follow in order to comply with these conditions;

a provision to the effect that the determination agreement will be rendered invalid immediately by a change in the relevant legislation (where a transitional arrangement has been made under which the determination agreement can remain valid for either the whole or part of its remaining term, the determination agreement will lose its validity either at the end of the period specified in the transitional arrangement or, as the case may be, at the end of the remaining term of the determination agreement);

a declaration by the taxpayer that the information, as included in the determination agreement, is not subject to one of the exemption clauses specified in Article 13, Paragraph 3, of the WIB; and

where the request relates to the application of the participation exemption, a provision to the effect that the applicant will finance the cost price of the participations for which the ATR is being requested with at least 15 per cent equity capital.

9. Exclusions

The Decree of 21 July 1995 (No. AFZ94/4519M), as most recently amended by the Decree of 26 January 1998 (No. AFZ97/4609M) and as further expanded by the Decree of 30 March 2001 (No. BOB2001/698M regarding good faith), sets out a general framework within which the tax administration is entitled to refuse to give advance certainty. In addition, the Decree regarding entities providing intra-group financial services without a real economic presence in the Netherlands; no advance certainty, the exchange of information and limited opportunities for crediting withholding tax of 30 March 2001 (No. IFZ2001/294M) describes a number of specific situations in which no advance certainty can be given. These decrees apply equally to the conclusions of ATRs.

10. Publication of ATRs

With regard to the Decree of 21 July 1995 (No. AFZ94/4519M), as most recently amended by the Decree of 26 January 1998 (No. AFZ97/4609M), the policy underlying the decision to issue or, depending on the circumstances, to refrain from issuing ATRs, will be published unless the relevant policy has previously been published. The relevant ATRs will be published either on an anonymous basis or - if it is not possible to conceal the applicant's identity even if his name is not revealed and where the revelation of the applicant's identity may constitute a breach of the duty of confidentiality laid down in Article 67 of the General Taxes Act - in the form of a summary. In the latter case, the summary should contain all of the elements that have determined the policy adopted.

11. Competency

For information on the competency with regard to taxpayers applying for an ATR, reference should be made to the Decree of 30 March 2001 (No. RTB2001/1195M) on Advance Pricing Agreements (APAs), Advance Tax Rulings (ATRs), financial services, conduit companies, the International Investors Desk and Rulings, and Organisation and Jurisdiction Rules (no English translation available).